NFOs have dried up; AMCs promote their flagship products more actively
AMCs are now busy promoting their existing funds which have performed well. This is in contrast to the situation two years back when companies were flooding the market with NFOs.
“You don’t need to come out with a NFO for money. An established track record definitely attracts long term investments. You need to concentrate on the funds which have been performing well and money will automatically flow in,” said Sundeep Sikka, CEO, Reliance Capital Asset Management.
Even distributors see most of the investment going into flagship products. “NFOs do not have a track record and investors have much more confidence on the schemes which have been performing well. Mostly, my clients have invested in flagship products of various AMCs,” said Harshendu U Kaka, IFA.
“The new rule to allot units in NFOs across multiple locations within five days poses a challenge for the companies, therefore the companies are cutting down on NFOs. Secondly, most of the investors are looking at investing in funds which have track records. And most of the flagship funds are large cap funds so it’s safer to invest in those funds,” said a spokesperson of DSP BlackRock.
